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Learn what to assess when deciding whether to buy health insurance for your practice on the exchanges.
Glitches and delays surrounding the Affordable Care Act’s (ACA) health insurance exchanges (HIX) may have caused frustrated business owners to bypass it as an option. However, the possible tax credits and out-of-pocket savings to you and your staff should be enough to get you to log in to evaluate if the exchanges are worth your time and money.
Between problems with the HIX and ongoing changes with ACA, making a decision on healthcare insurance has become more complicated for everyone, not just small business owners. Small businesses also faced a delay in signing into the healthcare exchanges-many had to wait until November 1 to begin shopping for plans.
Now, with the ACA public exchanges, private exchanges ran by insurance companies, and traditional routes of buying insurance through a broker, it is a lot harder to figure out the best way to maximize dollars. The first thing medical practice owners want to know is, can their business save money by purchasing their own insurance through the public exchanges? The answer may depend on where your practice is located, how many employees you have and what amenities your staff needs or can forego.
Most of the small practices that Debra Patterson, CFP, CLU, financial adviser with AXA Advisors based in San Francisco, California, works with have chosen to renew their current health insurance policies early and delay the decision to join the HIX to see how things play out in the next year. She says one of the complaints she has heard from her customers is that the complicated nature of the exchanges offer less customizable packages.
“The small practices I work with might have the doctor on a high deductible healthcare savings account, and the staff on a HMO (health maintenance organization). Many people don’t want to go on the exchange unless they can get a tax credit,” Patterson says.
Businesses have until December 15 to decide whether the exchanges are a good move for their staff. Below, we try to clear up any confusion about the HIX and how it can impact your practice.
Who needs to offer insurance in 2014?
The Centers for Medicare and Medicaid Services created the Small Business Health Options Program (SHOP), a program in conjunction with HealthCare.gov, to help small business owners compare insurance plans based on costs, features, and tax advantages. For example, businesses with fewer than 25 fulltime employees who make less than $50,000 on average can take advantage of tax credits available in 2014. These businesses can receive a credit up to 50% of their contribution toward premiums.
Since fulltime healthcare workers often make more than $50,000 a year on average, many medical practices may not qualify for the small business healthcare tax credit available through the ACA, Patterson says.
Businesses with 26 to 49 fulltime employees won’t incur any penalties, but are ineligible for tax breaks. If your business has more than 50 fulltime employees, the SHOP isn’t available to you until 2016. Finally, those businesses with 50 or more fulltime employees have until 2015 until they have to offer employees insurance or face a penalty.
Exchange plans and access to care
There has also been a lot of confusion surrounding what insurance companies are available on the HIX in each state, and whether those services are comparable to traditional plans. Some states, including New Hampshire and West Virginia have only one insurance provider on the exchanges, while the state of New York has 16. According to the Department of Health and Human Services, one-third of insurers are not offering plans on the exchange in states that they are authorized to sell insurance in. For small businesses, this means that prices may not be as competitive and there may be less access to networks of physicians.
David Alemian, a retirement planner for physicians based in Oceanside, California, says there are several factors that need to be considered before changing healthcare insurance plans, whether it is on the exchanges or a traditional plan.
“Each practice should look at your own situation, and decide if those on your plan are generally healthy or are they likely to need medical treatment because of pre-existing conditions,” Alemian says. “This can help when looking at which deductible to choose. Practices with healthy employees might decide to choose a higher deductible.”
Just like shopping for any other insurance plan, shopping on the exchanges will require you to assess factors that don’t necessarily add up to spending less money. Being aware of what doctors your employees are currently and how much prescription drugs cost are quality factors to consider.
“Check the doctor network and the prescription drug coverage to ensure that the right doctors are in the network and that any prescriptions that the employees may need are covered,” Alemian says. “If there is a particular prescription that is needed make sure it is covered, because not all drugs are covered, and some have higher co-pays by the different plans.”
Also important is making sure a new insurance company offers other benefits tied to wellness that improve your staff’s attitude toward healthcare. It’s the little things, such as customer service, that can make the difference between a good and bad experience for your staff with a new insurance company, says Alemian.
“Check on the customer service of the plan provider. When someone needs help from customer service, it means that they or someone they love is sick and they need a plan provider who is helpful,” Alemian says.
Helping employees decide
If your practice decides to purchase insurance through the exchanges, first you will have to notify your employees and then input their information, including whether or not they’re smokers, into the exchange website to generate individual costs.
From there, employees have to decide whether to accept a version of the insurance plan you have picked. They also have an option to decline coverage.
One benefit that the HIX has to offer is that business owners will be able to pick a base plan for employees, and employees will be able to pick their level of coverage based on deductibles and other out-of-pocket costs.
An employee can decide between bronze, silver gold, and platinum plans that offer different levels of co-pays and deductibles. Make sure to remind employees to review surcharges and restrictions for spouses and dependents.
3 Ways to Get the Most out of Your Healthcare Insurance
1. Bundle your health insurance plan with an accident and life insurance policy with a critical illness rider. “This is life insurance that you don’t have to die to use,” says David Alemian, retirement planner. “The critical illness rider enables the insured to take a portion or all of the death benefit if the insured is stricken with a critical illness such as a heart attack, stroke, cancer, blindness, major organ transplant, end stage renal failure, or blindness.”
2. Create wellness incentives. Helping your employees stay healthy will increase employee satisfaction, reduce time off for sick days and result in lower healthcare costs. A survey by the Department of Health and Human Services found that for ever dollar a business spent in wellness intitiatives such as flu shots, chronic disease management, and smoking cessation, it saved almost $4 in healthcare costs.
3. Ask an insurance broker. New healthcare laws seem to be evolving everyday. An insurance broker will be able to help you maneuver the regulations to find the right plan for your practice. Google potential brokers to make sure they have a strong reputation and to check if anyone has made complaints against them. Also, make sure they have good customer service, as you and your staff will probably have a lot of questions.